Zynga, social shares roiled after FB launch

LinkedIn, Groupon, Yelp, Renren post losses in wake of wobbly IPO

SAN FRANCISCO (MarketWatch) — Shares of Zynga Inc., whose online-game business is closely tied to Facebook Inc.’s fortunes, were halted for trading twice Friday as the stock tumbled in the wake of a relatively wobbly start to the No. 1 social network’s public debut.

Other companies in the social-media sector also saw their shares rocked during the Facebook stock kickoff, the biggest initial public offering of an Internet company to date.

Zynga’s
ZNGA, +0.40%
declined by 13.4% to close at $7.16, after trading in the stock was halted twice during the session.

Other social-networking shares posted sharp losses as well after Facebook’s
FB, -1.26%
eagerly anticipated launch. Facebook closed at $38.23, up a fraction.

Shares of LinkedIn Corp.
LNKD, -10.52%
the professional social-networking firm, traded down nearly 6% to close at $99.02, while Groupon Inc.
GRPN, +0.21%
shed about 7% to close at $11.58 and Yelp Inc.
YELP, +1.42%
fell 12.4% to close at $18.64. Renren Inc.
RENN, -0.57%
the China-based social network, also saw its stock fall by 21%, closing at $4.93.

Facebook IPO: Fanfare or fumble?

(18:08)

Mean Street hosts a discussion about Facebook's slow start out of the IPO gate, where shares almost ended flat, along with why photos are so valuable to social-media sites.

“Facebook not getting the pop everyone thought they would get perhaps made some owners of Zynga nervous,” he said.

Morningstar analyst James Krapfel also cited the heightened expectations for Facebook, which apparently have not materialized. “It’s not too surprising that Facebook’s less than spectacular debut is having negative secondary effects on social-media companies such as Zynga,” he wrote in emailed comments.

“We believe a certain amount of premium was built into the shares of companies such as Zynga, Groupon and Yelp due to the anticipated success of a Facebook IPO,” he added. ‘Now that the catalyst failed to materialize, shares are taking a hit. “

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